Growing air ambulance industry presents cost, regulation challenges

News Article

April 20, 2016

Becker's Hospital CFO

The air-ambulance industry can save lives, but it often spells financial demise for patients.

An article in the Billings Gazette follows the story of Montana resident Jason Ebert who was saddled with a $27,000 air ambulance bill, shedding light on the issue many states currently face. According to the report, air ambulance prices are largely unregulated because the aircrafts fall under the Airline Deregulation Act of 1978. This act protects airline industry fares, routes and services from state interference, with the goal of increasing competition and reducing rates.

However, in the air ambulance sector, competition actually increases costs, according to the report. The high fixed costs of operating the aircraft and staffing them with trained medical providers are difficult to offset when a company is competing for a small number of flights.

North Dakota passed legislation last year to attempt to regulate the industry, but a federal judge ruled the Airline Deregulation Act preempted the law, according to the report. More recently, U.S. Sens. Jon Tester (D-Mont.) and John Hoeven (R-N.D.) attempted to amend the Federal Aviation Administration reauthorization legislation to open up the industry to regulation, but that effort also failed, according to the report.

In large part, patients are receiving huge air ambulance bills because of issues between commercial payers and air ambulance companies, according to the report. Payers refuse to pay fair market value for the services, and air ambulance companies will not disclose their actual costs, according to the report. Until additional legislation can be passed, it seems consumers will have to be more aware of what transportation is in network for their plans.